Maha budget burden of poll sops, 7th pay commission hike

The widening gap between revenue receipts and revenue expenditure has resulted in a budget deficit estimate of 19,784 crore (0.63%of the GSDP) for 2019-20 — the highest in the past 15 years
According to finance department officials, savings on budgetary allocation made towards pay commission pay outs to employees and lower farm loan waivers have enabled the government to keep debt under control so far.(Kunal Patil/HT Photo)
According to finance department officials, savings on budgetary allocation made towards pay commission pay outs to employees and lower farm loan waivers have enabled the government to keep debt under control so far.(Kunal Patil/HT Photo)
Updated on Feb 28, 2019 12:43 AM IST
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Hindustan Times | By, Mumbai

The sops likely to be announced in an election budget this June and the burden of the 7th Pay Commission will come at a heavy cost for the state exchequer in 2019-20. The government is likely to raise estimated loans of 57,231 crore to meet these expenses. The budget books estimate debt at the end of March 2020 to be 4.71 lakh crore, but officials said it could be more than this.

The widening gap between revenue receipts and revenue expenditure has resulted in a budget deficit estimate of 19,784 crore (0.63%of the GSDP) for 2019-20 — the highest in the past 15 years. Even after initiating a cut of 10% on the outlay of various departments and social schemes in 2018-19, the estimated deficit as per revised estimates released on Wednesday is expected to be 14,960 crore by end of this fiscal.

The deficit has also increased owing to drop in collection from non-tax revenue, from estimated 22,784 crore to 17,050 crore, and a deficit of 1,700 crore in land revenue. The overall revenue has, however, increased by 12% from last year.

According to finance department officials, savings on budgetary allocation made towards pay commission pay outs to employees and lower farm loan waivers have enabled the government to keep debt under control so far.

Experts, however, raised objections over the utilisation of the loan amount for purposes other than capital expenditure. For 2019-20 too, the estimated budget for capital expenditure is 42,739 crore, against the proposed loans of 57,231 crore.

“The finance minister said state finances saw a surcharge revenue of 2,082 crore from the estimated deficit of 4,511 crore in 2017-18, owing to excess collection of GST. An assessment of financial statements shows that the government did not spend the outlay meant for social schemes that year,’’ said Rupesh Keer of Samarthan, an independent organisation that analyses the budget. He added, “When we verified actual expenditure from reconciled statements of accountant generals for 2017-18, we found that the allocation went unused. This is nothing, but manipulation of figures, and the government will continue to do it this year to reduce deficit,” he said. Finance minister Sudhir Mungantiwar said, “We will ensure every rupee raised out of loans is used prudently and to create assets,” he said. The additional burden of salary hike of government employees after 7th Pay Commission is 36,000 crore — 48% of revenue receipts. The government will end up paying 35,207 crore or 11.27% of the receipts towards interest on loans from various sources. This fiscal, nearly 59 % of state revenue worth 3.14 lakh crore will go towards meeting wage bill and interest payments.

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  • ABOUT THE AUTHOR

    Surendra P Gangan is Senior Assistant Editor with political bureau of Hindustan Times’ Mumbai Edition. He covers state politics and Maharashtra government’s administrative stories. Reports on the developments in finances, agriculture, social sectors among others.

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